>> some of the trends going into the ukraine crisis really extended. >> the market will be withholding for some time. >> you need to look to the medium-term and hold that line. >> i think we have been through a very standard correction here. >> this is not an economy that will go quickly into recession. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: live from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance" on tv and radio. live with lisa abramowicz and kailey leinz, i'm jonathan ferro. a conversation between the president of the united states and european leaders. lisa: they are going to try to understand what comes next is this conflict rages on, as the war in ukraine continues to take

a serious toll. what is the exit strategy here? is there an offramp, or has that become more elusive the longer this has gone on? jonathan: getting whipsawed by some of the conversations come of the talks of the kremlin this morning, saying progress is "less than we would like." lisa: do markets even care at this point? people are looking at mariupol, the city in ukraine, and whether there's any willingness to give it up by that deadline today, the demand that russia has placed on them. unlikely that they will. it is catastrophic and so depressing to see this and not see that offramp. jonathan: the biggest week of gains on the s&p going back to november 2020. kailey: looking right through any geopolitical risk out there, the question is, is that a sustainable rebound or was it a dead cat bounce?

that is the theory from mike wilson at morgan stanley, saying that is a classic air market rally that may continue in the near term, but ultimately it is a rally you want to sell. jonathan: they upgrade utility, remain focused on valuation. lisa: i would argue if you can translate anything in the bear market, it is confirmation of the morgan stanley view of a hotter and shorter cycle that ends with some sort of down term in the near term. that seems to be what you are seeing in those yield curves. jonathan: the curve slowly inverting. we will pick up on that a little bit later. futures down 011% on the s&p. on the nasdaq, down 0.25%. crew just north of $109, up 4.4% today. lisa: crude is really a moving target. yields have more of a direction and it really speaks to what we were talking about earlier.

this belief that we will see short-term inflation spike up and longer-term recession, and then a return to normal that we had expected to see before the pandemic. today we see a load of fed speak, including atlanta fed president rafael bostick, as well as fed chair jay powell, speaking at the national association for business economics conference. how much do they talk about concerns about the yield curve, particularly the twos-tens spread that a lot of banks look at more closely, and portending something negative? how concerned are they about torpedoing the economic recovery versus inflation that is almost on the threshold of feeling a bit on more -- i bit -- a bit unmoored? what comes next in this conflict from western allies in terms of response? do they get a sense of whether germany is willing to cut off gas supplies from russia?

today, treasury secretary janet yellen, as well as national security advisor jake sullivan, and off the record meeting with a number of business leaders, exuding conocophillips, jp morgan, other commodities producers. how much is this an issue with respect to the commodities, at a time when consumer sentiment is deteriorating? jonathan: we will touch base and just a moment. a story we want to stay on top of but treat with the care it deserves, boeing is down by a little more than 6%. a report out of china that a boeing 737 crashed with more than 130 on board. very slowly, as you might expect, putting together a pitcher of what has happened here. more headlines pouring out. kailey: we are waiting for the

cattle count -- the casualty count on that crash. we are getting news from a financial organization in china which has said that china eastern will halt boeing 737 800 planes from tuesday following that crash, so you are starting to see a little bit of the ripple effects. this is after xi jinping called for an investigation into this. he said they need to find the reason for that crash. jonathan: thank you. boeing $180 in the premarket. when the headlines come through, we will share them with you. our team coverage starts now on ukraine and russia. bloomberg's annmarie hordern, maria tadeo in brussels. the conversation lisa keeps talking about between secretary yellen and corporate america, the oil patch, wall street, what are you excepting from the call? annmarie: i think first they are going to talk about the disruptions we are seeing and supply chains, the havoc that

decoupling from russia has placed on the commodity markets. this has increased the premium on oil prices which has trickled down to the gasoline pump for everyday consumers. you have the administration really doing a 180. we saw that from took terry granholm, saying that this is a war time, you need to start pumping more oil, but at the same time, this administration is also criticizing those same companies for returning profits to shareholders. just recently, the president was talking about higher gasoline prices on twitter and saying that oil companies are patting their profits at the expense of everyday american consumers. this is probably going to be a very frank conversation between the oil and gas sector and the administration. lisa: the timing of this is curious, i had president biden heading to year, especially in 10 with what we are seeing -- in tandem with what we are seeing and securing other resources. annmarie: america is a huge lng

exporter and producer, particularly to europe. the issue, and what we saw from germany going to qatar, they are trying to ensure these supplies if they were going to lose their dependence on russia. germany indicates it has at the moment zero lng terminals and they are trying to expedite the building of those. you have the lithuanian foreign minister, and i wrote this down, saying today that at some point, we are going to have to talk about energy. at some point, energy is going to have to come on the table if they continue these sanctions. this is going to be the hardest issue for europe to sanction, the hardest sector for europe to decouple from. kailey: maria, what are you hearing around this conversation? maria: the one thing i have noticed today, and i have been here speaking to a number of officials on the record, but also behind-the-scenes, is that this debate around what to do with energy has been reinvigorated over the past 48 hours. there was an impression, almost

a theory up until he week ago, that germany already said this cannot happen, so let's move onto something else. the dutch also jumped on that, saying we have to be realistic. the debate was put to the side. but today my impression is that this is reinvigorated. it will come back for european leaders to debate on thursday. the fact that president biden, who has ordered a full ban on imports, and the u.k. a partial ban on these imports, will be attending on thursday evening here in brussels, has made this debate top of the agenda, so i would not bet that we have seen the end of this conversation. jonathan: walk me through the end of this week. this is a really important moment for the president, flying into europe. is that for a show of unity? will we have some deliverables? what are we expecting at the end of this week? maria: when it comes to ukraine

in particular, this is on the top of everyone's minds, but it is becoming very clear that this is a situation that the ukrainians and the russians are still stuck in their ways, and that negotiations have to be done on a bilateral basis. president zelenskyy has repeated many times, he does not mention president biden as a mediator. what he says is that we need america to provide weapons and the rest will have to deal with vladimir putin directly. when it comes to this visit to brussels, i would argue a lot of this is more about unity when it comes to eastern europe. we have seen a number of countries, the baltics, poland, romania, the moldovan foreign minister just a few minutes ago, they are concerned about this. they believe russia is become increasingly aggressive and they want to see this ironclad guarantee from the united states that they will help with weapons and will help with nato deployments on the ground. jonathan: the two of you brilliant over the last month. thank you so much.

i'm going to catch up with you going into the opening bell. maria tadeo and annmarie hordern as well. look out for maria, 8:30 eastern time, about 90 minutes or so from now, sitting down with latvia's defense minister. that conversation just around the corner on bloomberg tv and radio. there was a question, several going into the weekend, as to what might happen this week. with the president visit ukraine , go to the capital? the white house press kit or a, no plans to press secretary, no plans to travel into ukraine -- house press secretary, no plans to travel into ukraine. lisa: this comes as european leaders did had to ukraine, which was a first ever, to head into an active war zone for leaders. i do wonder what comes out of this. just to go to gina fordham's point, there is no offramp. how can some of these --

especially in response to some of the visuals that are just heartbreaking. jonathan: we will stay on top of that visual. also, chairman powell a little later, after hearing from several fed speakers going into the weekend, president barkan seeing very open to half-point moves. governor waller considering a big move. i believe we will hear from bostick of atlanta a little bit later, too. lisa: that is going to be at eight a clock a.m. -- at 8:00 a.m. how much cold water do we get from powell? he seems to be characterizing things a little bit differently. jonathan: i want to hear from the man himself and get our hands around his view. futures essentially unchanged on the s&p. yields are higher by three basis points on tens. from new york, this is bloomberg . ritika: keeping you up-to-date

with news from around the world come up with the first word, i'm ritika gupta. a boeing 737 has crashed in china. the china eastern flight was going to guangzhou when it crashed in a mountainous area in the southwestern province of guangxi. the plane involved was not the boeing 737 max that was grounded after two fatal crashes. china eastern will stop flying that model of planes for now. ukraine has rejected a russian demand that its forces lay down their weapons and leave the city of mariupol. the ukrainian government says that instead, russia should let residents leave and deliver aid to those who want to stay. peace talks between the two are likely to resume today. the european union looks set to reinforce the u.s. warning to china against helping vladimir putin. that is that china would face serious consequences if it tried to cushion the blow of sanctions against russia or provide sky with military support.

china has repeatedly denied that russia has asked for help. in hong kong, the government has scrapped some coronavirus travel curbs and laid out a roadmap to ease social distancing measures. a ban on flights from nine countries will be lifted, plus the amount of time travelers spend in mandatory hotel quarantine will be cut in half. warren buffett is returning to dealmaking. berkshire has agreed to buy venture isla gunny -- buy ventura allegheny. alleghany operates primarily in insurance. i'm ritika gupta. this is bloomberg. ♪

>> we have escalated the pressure on putin and we will continue to put additional pressure on him. we know that he is feeling the pressure. we know that the pressure is being felt on the russian economy. jonathan: that was the u.s. ambassador to the u.n. on msnbc over the weekend. from new york city, good morning. futures unchanged on the s&p, almost unchanged on the nasdaq. crude up by 4.6%, $109.50.

kailey, how is your bracket? [laughter] kailey: not as good as it was on friday. jonathan: you are doing better than me. drumroll, tk is beating me in this. [laughter] lisa: is that is why he is taking the day off, for a victory? jonathan: tom keene active on twitter. you can work out where he is, i think. perhaps. i am not going to reveal that for him. unlike tom, who tells everyone where i am at any given time. leslie falconio joins us now, head of fixed income asset allocation for ubs. chair powell coming out in a news conference on wednesday. the curves starting to invert a little bit. can you make sense of this?

why a repricing that's why are we pricing in some aspects of fixed income that we had a dovish meeting? leslie: i don't think it is that surprising when you think about what is happening with sanctions, with russia and ukraine, and some of the increase in the supply chain bottlenecks in oil that we are seeing. but reaching that 10% level is not concerning, but it is something that the fed is going to watch going forward. our expectation for real yields in the tin ear -- the 10 year is to move higher. particularly the long end as the fed starts to become or aggressive to come down. but that shortened is really moved by sentiment and things like oil. the breakevens might stay higher for quite some time. lisa: this is the aspect that really does not make sense to me, that not only do we see 10 year treasury yields still relatively oversees the -- relatively low versus the expertise and for inflations,

but also, people are pouring money at some of the fastest paces we have seen in the past decade. does this make sense to you that people feed value into the 10 year? leslie: our expectation is looking for about 2.3% in year yield. you have to remember how quickly we have moved. now that the fed has become fairly aggressive, not to mention the fact that we do have qt in may, there is a normalization of the yield curve. so i understand why people would want to stop and some interest-rate risk on these levels. kailey: twos-tens, does it invert? if so, when? leslie: i think there is a potential that twos-tens can invert in the latter half of the year, but i think it is also

important to note that it is the magnitude of the inversion and how stable that is. we all know when the curve inverts, it is a coincident indicator to three years out of a recession. but we look at things like the two-year yield, these are some of the biggest moves we have seen, the fed only going 25 basis points. the fed funds rate would already be at 1.5%. jonathan: just look at the yield curve them. threes are basically in line with tens. five year yields are above tens. seven-year yields are above tens. should that constrain risk appetite elsewhere, or do you think investors will just look through some of this? leslie: i think it is going to depend on real yields. real yields are still negative. at the end of the day, it really does come down to the consumer. consumption is still very strong. let's not forget the majority of

consumer debt is mortgages, and the majority of those mortgages are fixed. we do think that obviously, you could have some headwinds from the inversion but also remain negative. lisa: so what are you actually doing? leslie: we have had on the fixed income side more of a risk on. the expectation is that yields rise heading into the year. we have had a bit of what we consider credit exposure, and now again we start to normalize as we see this headwind from interest rates going higher and spreads widening, two variables which may not be a bad time to go up in quality. we don't expect rates to really move materially higher here. jonathan: leslie, thank you for your perspective, as always. leslie falconio of ubs global wealth management. some headlines from foreign ministers in europe. let's give you the debate as it

stands. the foreign minister from lithuania said it is unavoidable to talk about the energy sector. this is about potentially sanctioning russian energy. this came from hungary moments ago, from the foreign minister out of hungary. you sanctions on russian energy -- you sanction on russian energy "-- eu sanction on russian energy "redline for hungary." lisa: this is the stress that they feel. how much do you see that unity break down as different countries in the european region have different dependencies on germany -- on russia? how do you deal with that going forward? jonathan: it is pretty clear this morning, pretty evident that to some degree, there unity on this issue has already broken down. kailey: absolutely. you are hearing different things from different players within the european union. there's a lot of different opinions to put together, but also, if you do see some kind of action, how is fiscal policy going to step in and

subsidize what consumers feel when it comes to those higher energy costs? the remarks we got from christine lagarde earlier today were really telling. she said monetary policy cannot do everything. fiscal policy must provide support during a war. jonathan: and what happens to italian yields after that? they are stuck between a rock and a hard place, aren't they? this is so difficult for this ecb. they've got an inflation problem. if they don't do enough, italian yields go higher. it is tough. lisa: we keep talking about the fed and the potential pivot. the pivot that we saw from the ecb cannot be overstated because they clearly are putting inflation first, even as they talk about these risks. we watched the press conference where christine lagarde took all of that hawkish rhetoric in a statement and turned it into something else that was much more soothing to markets, but at what point are they going to have to deal with inflation, and frankly, torpedoing confidence? jonathan: they get tough.

those news conferences get really tough to watch. futures up 0.1% on the s&p. on the nasdaq, basically unchanged. yields higher by three basis points. crude backing away back to $109. from new york, this is bloomberg. ♪ ♪

jonathan: use this strength to position more defensively. that is the message coming out of morgan stanley and mike wilson this morning. futures basically unchanged on the s&p. after last week, the biggest week of gains going back to april 2020. even with this developing in the bond market, twos, fives, and tens, you two-year very close to 2%, just short of that level, up five or six basis points on the day. the curve is flatter again. twos 20's, twos-tens around 20 basis points. look at where fives are. fives are 2.1953%. tens at 2.187 0%. not just about flatter. it is about inversion. this story is flipping quickly. lisa: inversion all along the

yield curve. a lot of the other ones, people start to game out, we have this very high inflation in the near term and slumming over the long term. how does the fed handle this? where that inversion happens matters as to gaming out when the recession will take place, and that matters for the risk assets story that has been a conundrum for all of us. jonathan: what does chairman powell think of this one? we will find out when he speaks a little bit later. i am looking forward to that. let's finish on crude. wti and brent on one side. lithuania saying we need to talk about energy and sanctions on russian crude. gary ends coming out and saying that hungary -- hungary coming out and saying, redline. if sanctions is what you are looking for to take this arch higher, even without it, amrita sen of energy aspects still teed up $150 on brent, and brent right now, $112.40. lisa: her comment was basically

the lack of liquidity is keeping prices low, not high, and the more liquidity into these markets, the more you will see prices rise further. how much are we looking at a new world order of oil and gas? jonathan: crude up 4% this morning. we will pick up on this and just a moment. let's look at the cross asset price action. we can say good morning to kailey leinz. kailey: one story we have been keeping on top of is boeing. a boeing 737 plane has crashed in china in the southwestern province with 132 people on board. no news yet on the casualties. the news we have gotten is that china eastern, the airline operating that aircraft, has halted all 737 800 flights from tomorrow. so boeing is down about 6.25%. another big downside mover is nielsen holdings on news that a deal is not happening. private equity players including brookfield and elliott made a $24.58 bid per share for this company.

nielsen saying that does not give adequate value to its shareholders, so that stock is down about 18% for the belt, trading just south of $20 a share. anaplan, a $10.7 billion takeover deal. $66 a share, a 30 percent premium to friday's close. the stock higher by 28% in early hours as a result. finally, to come back to the oil story, we are getting a lift in oil prices and a subsequent move when it comes to some of those energy stocks in early hours. devon energy up around 2.5%. i wanted to point out exxon, up about 1.5%, but exxon among the companies that are going to be meeting with janet yellen and jake sullivan later today in an off the record call, talking about sanctions. jonathan: very intrigued, aren't we? i think we all are. it is about a request, the debrief on sanctions, navigating sanctions, all of the above? lisa: do they give incentives?

how did they make this work? this of course also comes before we get that debate in europe about what happens next with sanctions on gas. jonathan: do you think they want all of these companies to pull back from russia even if the sanctions don't require them to do so? lisa: right now, it is politically infeasible to be handing money to russia. that is the bottom line, whether it is a company, whether it is the government. that is why germany has come under so much pressure to stop handing over $1 billion a day or something to russia because they have no other option right now. jonathan: not just about handing money over, but what about making money from the russian economy? lisa: yes, although at a certain point, the morals do come into play. you're right, how much is this not an economic story? how much is this a strategic and moral story? i am not sure the answer. in the short term, perhaps.

in the long term, people are realizing that they can't rely on this area. jonathan: clearly, some of the banks still suggesting you buy corporate debt coming out of the russian economy. lisa: are you talking about goldman sachs? jonathan: there are plenty of names in the mix still doing business with russian companies, and the can because the sanctions don't require them to back off. there are a few european companies who have not declared their exit either. other large ones are still there, still operating. lisa: i want to be careful here. it is one thing to cut off the economy to bring an end to this war. it is another thing to demonize all of the people who live there as well. i think that is a very difficult line to draw. then you have company trying to make money. i think the clear line is don't prioritize money before lives, that is deftly the zeitgeist right now. jonathan: can you do both? lisa: i don't know. that is above my pay grade. do you have answers to this. jonathan: no. lisa: i wish i did. jonathan: that is the debate now. michael shaoul joins us now, ceo

of market fueled asset management. -- of marketfield asset management. the market could go a bit higher. we remain convicted. it is still a bear market. we position were defensively. do you agree with that line from morgan stanley? michael: i would say partially. going negative on the innovation trade for the last few months, my feeling is that this is a bear market in that part of the market. obviously it can rally even 50% and it would be down 50% from the top at that point. i don't think defensive is the way to go. i am still a big believer that the physical global economy continues on. i think this idea of stagflation is mistaken. we still have very high nominal

growth, and that has shifted very heavily towards the physical economy. so i think the weakness in commodity stocks 10 days ago was yet another buying opportunity, and i think that global indexes with high commodity weights, this correction again was a buying opportunity. the overall u.s. equity market still has too much tech in it for my comfort level, but i had a feeling that the fed announcing its new interest-rate policy would be an excuse for people to get back involved and feel that the worst is behind them, and a multiweek tradable valley as an outcome of that i think is a very feasible asportation. -- feasible expectation. lisa: do you think that equity traders are still betting that we will get some resolution to the war in ukraine in the next couple of months? michael: no, i think everybody

is as confused as you guys sound, to be honest. i thing as far as the market is concerned, it is just one aspect of the larger inflation story. to me, the transition from an ultra low inflation environment to a very high inflation environment which has taken place over the last 18 months, understanding that is all that matters. we've had a big recalibration of expectations between interest rates and inflation expectations , but really we have not gone far enough. we are still in what i would call a medium-term transitory mindset. the fed expectations or the market expectations remain that this problem magically goes away somewhere between late 2022 and mid 2023, and nobody to my mind is able to really give me an adequate estimation of how that actually happens. ukraine is part of that story, but only part of that story. kailey: take that inflation narrative and put it together with the growth on.

there's a conversation about stagflation, than there is a separate conversation about outright recession. do you think either is the more likely trajectory through next year? michael: it depends on how you measure. if you want to look at real growth, the battle between nominal growth and the underlying inflation rate could be won by inflation, but people have to understand that corporate profits and share prices live in the nominal world, not the real world. what we imagine happening is strong nominal growth, lots of inflation. for the right parts of the global economy, that translates into a very powerful period of growth, but for the wrong parts of the economy, that translates into a margin squeeze. whether or not the quality recession is not so important to me. what is important is going to be which side of the divide have you got your portfolio. jonathan: there's nothing new here. i sound confused every morning. nothing has changed.

[laughter] michael shaoul speaking for all of us. we are the confused ones. shade at us, but it's fine. lisa: i can accept it. i am rather confused about what is going on. jonathan: just people aren't as confused as you, apparently. [laughter] make sense of it for me, based on what we just heard. breakevens higher, not lower after chairman powell last week. does that make sense, based on what we got from the fed speak going into the weekend? lisa: it does make sense in one way, which is the reason why people thought he was dovish was because he could've done more. he has been talking hard, but he did not end the purchases more quickly than expected to the balance sheet. he did not begin reduction work with me. he did not raised by 50 basis points this time, and some people said he should have. if you are not taking that action, how do we know he's going to follow through with some of the hawkish talk? if they don't come out with strong measures, that leads to longer-term inflation to be

higher because what is going to crimp it? that is what the market is wrestling with. jonathan: so are we going to keep rallying as this yield curve inverts? fives above tends, sevens above tens. lisa: we could. there's typically 12 to 18 months after yield curve inversion that things can keep rallying, and yet the old-school people say it does not matter anyway because it is all distorted by the fed. the reason why i did not come up with a narrative is because you can come up with any cute narrative to 50 market action and it is going to change tomorrow. jonathan: i was convinced after wednesday that we are just making this up. so many people are making this up. lisa: just after wednesday? jonathan: particularly after wednesday. [laughter] 1.99% on twos this morning. unchanged on the s&p and nasdaq. a confused "bloomberg surveillance." ritika: keeping you up to date with news from around the world, with the first word, i'm ritika

gupta. in china, a boeing 737 operated by china eastern airlines has crashed. there were 132 people on board. no word on casualties. video shows smoke and wreckage in a mountainous area of the southwestern province of guangxi. the plane that crashed was not a boeing 737 -- was a boeing 737-800, according to a media report. russia's attacks on ukraine have forced 10 million people to flee their homes, almost 1/4 of the population, according to the unit -- to the united nations. about 4.3 million people have fled to other countries. 2.3 million of them are in poland. president biden's administration will brief business executives today on the impact of ukraine and the sanctions that followed. exxonmobil, conocophillips, jp morgan, and bank of america.

in the u.k., prime minister boris johnson turning to the nuclear and wind sectors to try to boost the country's industry -- the country's energy lisa: -- energy. there has been a board checkup at credit suisse. the vice-chairman is stepping down from his role, along with other members of the board. credit suisse is reeling from a series of scandals earlier this year. the chairman was ousted after just nine months on the job. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> any threat of the use of a nuclear weapon, any rhetoric

regarding a nuclear weapon is very dangerous, so i remain confident in our ability to defend ourselves and our capabilities, but i don't think that kind of conversation, that kind of rhetoric is helpful. jonathan: lloyd austin, the defense secretary, on cbs over the weekend. futures unchanged on the s&p end on the nasdaq. year-to-year very briefly through 2%, at 1.999% right now. there it is. we've seen moves in these bond markets, 10 year yields up to 2.19%, and some curve inversion. fives and sevens dancing around where the 10 is right now. lisa: tom would be proud of you going out all those decimal places. jonathan: that was just for him. [laughter] lisa: how much are we counting on the fed to act aggressively versus people thinking they are still behind the curve, will stay behind the curve, and will allow inflation to get much

higher than people have seen in years? jonathan: have you seen this survey from the national association for business economics? they have their annual meeting today. 77% of policy survey panelists view current policy as too stimulative. most of these respondents, that is behind the curve. lisa: and they don't think they are going to get ahead of the curve because i don't a speck the fed funds rate to get through 3% next year, so this dissonance between the fed and what we are seeing on the ground. jonathan: we've got a conversation now with dave altig, director of research at the federal reserve bank of atlanta. we come to you first. that survey is pretty brutal. what is this fed going to do about it? david: well, the fomc is going

to do what the fomc does, conduct monetary policy, of course, as they deem appropriate to meet the committee's goals. i am not quite sure the survey is going to move the needle. it is worth recognizing and remembering that the survey was done in the field a week before the meeting itself, so we are not quite certain how that might have moved the needle on sentiment. i imagine i won't be talking to a lot of people -- it will be talking to a lot of people today who will they may know that she will let me know how it moved the needle on sentiment. our members in name have some concerns about inflation and fed policy. lisa: do they think that the fed is deliberately going to remain behind the curve, or do they think that we are going to get a fed incapable of curbing inflation in a cycle where it is a lot of supply chain driven

issues, when you have really a conundrum where the only way for them to counter it is to dampen demand in a tenuous recovery moment? david: it is a little bit hard always to interpret what any group of individuals mean when they answer a survey like this. there are a couple of the details in the survey itself which gives some clues about what might be generating some of this not so sanguine view of inflation. ukraine is definitely looming large, and it shows up in two places in the survey. the first place, there is a clear sentiment that the situation in ukraine is going to exacerbate, sort of elongate the process of getting supply chain disruptions back into order. in the second is reaction that

because of the uncertainty associated with the situation in ukraine and probably broader geopolitical concerns that it will create a scenario where there will be a more cautious approach than what otherwise should be. so i think in part, those are elements underneath the pessimism. i didn't pick up any sense that it is a belief that the situation with the inflation rate is not being taken seriously or that pay that towards the inflation fight -- that pivot towards the inflation fight is just lip service. i think it is a lot of other things that are making people concerned about whether things will be as impressive as they would like them. lisa: what is your view on the ground as head of research at the atlanta fed on gdp, on

wages, of the resilience of the american consumer? david: we are still detecting virtually no signals of any softening of demand. when we talk to firms, and we talked to a lot of them, we spend a great deal of time with our boots on the ground, talking to the people actually making pricing and employment decisions, there's not much of a signal we are getting that consumer demand is substantially weakening. pricing power appears to not be waning at all, at least from the anecdotal reports, and actually from survey reports as well. the question is always how long can that last, but no one is ringing the bell about the process of fairly strong and

resilient demand. that assumes -- that seems to still be the play. kailey: at what point would you start to expect demand destruction to kick in? is there an historical level that you would be watching? david: no. one of the things we have obviously been fairly concerned about and tuned into is the waning of the fiscal stimulus, but if you, for example, track consumer spending with wage and salary income, those things track very closely, and what that means is there was an awful lot of the stimulus that was essentially kept in reserve and not used to support in a substantial way spending beyond the early days of the pandemic. so it would seem from that sort

of information, that sort of data, that there's not a situation where the consumer is way out over their skis and unable to sustain through the fading away of all of the support that happened as a result of the pandemic. jonathan: awesome to catch up because i know you've got a busy week ahead of you. thanks for spending some time with us. dave all take -- dave altig from the federal reserve bank of atlanta. scott guggenheim says, "base vsdr -- base case would be a 20% rise from here, even with what is going on in the bond market right now." lisa: a 20% rise in yields? jonathan: equities. lisa: a 20% rise in equities. jonathan: you could still have a big, sharp snapback from where we are. lisa: where do we? i am sympathetic to this

argument. would you go into bonds given inflation, or would you go to companies that get money? jonathan: it is a pretty interesting time. i'm going to reiterate that call in just a moment when we are back. we will talk about this. coming up tomorrow, saint louis fed president jim bullard. ♪

>> the big elephant in the room is inflation. that is the issue. >> commodity prices were already on the upside, but they are definitely getting pushed higher. >> what the fed need to do is send that is simply step up on inflation. >> unless they can fix the supply chains around the world and do something about energy prices, i think they are tilting at windmills right now. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: what a fascinating bond market. if you are not inter